UBA Shares Slump 23% in Two Days After Lender Suspends Final Dividend
Shares of United Bank for Africa Plc (UBA) fell 23.3% in two days after the lender said it would not pay a final dividend for the 2025 financial year, citing regulatory-driven provisioning.
Nigerian Exchange data show UBA’s share price dropped to N44.6 on Tuesday from N55 on Friday, when it published its full-year 2025 results.
UBA declared an interim dividend of N0.25 per share in 2025, implying a sharp drop in shareholder payout versus a total dividend of N5.00 in 2024.
“We expect the market to react negatively to the absence of a final dividend,” CSL Research analysts said in a note on Monday.
Profit falls for first time since 2013
UBA’s profit after tax declined 47.2% to N404.7 billion in 2025, marking its first annual profit drop since 2013. The result underscores a reversal from the outsized gains recorded across the sector in the last two years, when currency devaluation and high interest rates boosted earnings.
Income from financial instruments weakened sharply: interest income on fair value through profit or loss (FVTPL) securities fell 87.6% to N9.21 billion. Funding costs rose, with interest expense increasing to N1.03 trillion from N859.2 billion, while loan impairment charges climbed 52.6% to N331.1 billion.
UBA CEO Oliver Alawuba said the higher impairments were largely driven by regulatory requirements rather than deterioration in core operations.
“We’re going after these defaulting customers, and there are signs that they are paying back. Once they do, we’ll be in a position to pay dividends,” Alawuba said on Arise TV on Monday.
He linked the missing final dividend to a Central Bank of Nigeria directive requiring banks to exit the regulatory forbearance window, which pushed UBA’s non-performing loan ratio above the threshold for dividend distribution. “That dividend didn’t come because the NPL ratio was a bit higher than expected for a dividend payment. However, the good news is that this is a one-off thing.”
The bank said it expects to resume dividend payments in 2026, supported by recoveries and improved asset quality.
Sector-wide pressure
UBA’s profit decline mirrors a broader slowdown in Nigeria’s banking sector, with peers including Guaranty Trust Holding Company Plc and FirstHoldCo Plc also reporting weaker earnings after two years of strong growth.
The softer trend has extended into 2026. UBA reported Q1 2026 profit of N146.6 billion, down from N189.8 billion a year earlier.
